STATUTE OF LIMITATIONS FOR HANDLING LABOR DISCIPLINE 2025
Topic 34:
STATUTE OF LIMITATIONS FOR HANDLING LABOR DISCIPLINE
Senior Lecturer, Dr. Lê Thị Thúy Hương
SUMMARY OF THE CASE AND COURT DECISION
[Judgment No. 01/2019/LĐ-PT dated April 2, 2019, of the People’s Court of Kon Tum Province regarding a labor dispute over labor discipline handling.]
Summary of the Case:
On November 20, 2017, Mr. Nguyễn Hoàng, Chairman of the Disciplinary Council of Bank N., Kon Tum Province Branch, issued Decision No. 1631/QĐ-NHNo-TH regarding the enforcement of labor discipline against Mr. Nguyễn Kế, Director of the Bank N. Branch in K. District, Kon Tum Province (“Decision 1”). On November 23, 2017, Mr. Tiết Văn, General Director of Bank N. Vietnam, issued Decision No. 3323/QĐ-NHNo-TCTL dismissing Mr. Nguyễn Kế from his position as Director of the Bank N. Branch in K. District (“Decision 2”).
The violations attributed to Mr. Nguyễn Kế were identified as follows: (1) Failure to fully perform the duties and responsibilities associated with his position as stipulated by the Bank; (2) Allowing subordinates under his direct management and supervision to violate the Bank’s mechanisms, regulations, operational procedures, and internal rules; (3) Exploiting his status as an employee and the Bank’s reputation by using personal funds, borrowing money from branch employees and relatives, to assist customers in repaying debts to the Bank; (4) Causing internal disunity within the organization; (5) Submitting complaints to unauthorized entities with content that misrepresented the facts; (6) Failing to sincerely acknowledge his mistakes or admit his wrongful actions.
Disagreeing with Decisions 1 and 2, on April 24, 2018, Mr. Nguyễn Kế filed a lawsuit requesting the Court to: (i) Annul Decision 1 issued by the Chairman of the Disciplinary Council of Bank N., Kon Tum Province Branch, and Decision 2 issued by the General Director of Bank N. Vietnam; (ii) Order Bank N. Vietnam to reinstate his position and related benefits, citing improper disciplinary procedures, expiration of the statute of limitations, and the issuance of disciplinary decisions by two levels of authority for the same violation;
(iii) Demand compensation of 13,500,000 VND for emotional distress and require the General Director of Bank N. Vietnam to issue a public apology as prescribed by law; (iv) Require Bank N. Vietnam to provide material and emotional compensation in accordance with legal provisions.
Court Decision:
The Court ordered Bank N., Kon Tum Province Branch, and Bank N. Vietnam to annul Decisions 1 and 2 against Mr. Nguyễn Kế due to the expiration of the statute of limitations and violations of the principles and procedures for handling labor discipline.
COMMENTARY
I. Introduction
When addressing an employee’s violations by applying labor discipline measures, employers must not only ensure compliance with the conditions enabling them to exercise this right—such as having a lawful basis for discipline, adhering to labor discipline principles, and following proper procedures and authority—but also ensure that the disciplinary action falls within the permitted statute of limitations. Through an analysis of Judgment No. 01/2019/LĐ-PT dated April 2, 2019, of the People’s Court of Kon Tum Province (hereinafter referred to as “Judgment 01/2019/LĐ-PT”), the author will clarify the provisions related to the statute of limitations for labor discipline as stipulated in the 2019 Labor Code and other applicable legal documents.
II. Legal Issues
- Types of Statutes of Limitations for Handling Labor Discipline
The statute of limitations for handling labor discipline refers to the time limit prescribed by law, upon the expiration of which an individual who has committed a disciplinary violation will no longer be subject to labor discipline measures. The purpose of this limitation period is to eliminate unnecessary disciplinary actions.
In many cases, if an employee complies well with labor discipline for a certain period following the commission of a violation, imposing discipline may no longer serve a significant purpose, as the primary objective of labor discipline is to enhance employees’ awareness of and compliance with disciplinary rules. The statute of limitations also protects employees from the constant threat of disciplinary action, which could negatively impact their lives and employment [University of Law, Ho Chi Minh City (2022), Textbook on Labor Law, supra, pp. 372-373].
Under current regulations, the statute of limitations for handling labor discipline is divided into two categories:
(1) Six months from the date of the violation in ordinary cases;
(2) Twelve months from the date of the violation in cases where the violation is under investigation and “directly relates to finance, property, or the disclosure of technological secrets or business secrets of the employer” [Clause 1, Article 123 of the 2019 Labor Code].
The law provides a longer limitation period for these specific violations because they are deemed serious and complex, and their detection is neither straightforward nor immediate. Notably, the statute of limitations for labor discipline is calculated from the date the violation occurs, not from the date it is discovered, as was the case under previous regulations. Therefore, the differentiation of limitation periods as outlined above is appropriate.
In Judgment 01/2019/LĐ-PT, Mr. Nguyễn Kế was disciplined for multiple labor discipline violations. However, these violations did not occur simultaneously. Specifically, the violations for which Bank N., Kon Tum Province Branch, disciplined Mr. Nguyễn Kế included:
(1) As the head of the Bank N. Branch in K. District, Mr. Nguyễn Kế allowed internal disunity to occur within the branch.
(2) He exploited his status as an employee and the reputation and brand of Bank N. to engage in debt restructuring and receive interest or commissions from customers.
(3) He used his own money, as well as funds from certain employees working at the Bank N. Branch in K. District and relatives, to lend to customers for repaying old debts and obtaining new loans.
(4) He abused his position and assigned duties for personal gain, violating Point b, Clause 2, Article 18 of Internal Regulation No. 600/QĐ-HĐTV-TCTL dated August 19, 2015.
(5) He directed tellers to collect debts without customer involvement, instructed staff to lend in violation of regulations to meet year-end business targets, and engaged in circular money transfers to subsequently settle loans of other customers.
(6) He allowed subordinates under his direct management and supervision to violate the Bank’s mechanisms, regulations, operational procedures, and internal rules.
The Disciplinary Council of Bank N., Kon Tum Province Branch, relied on the following evidence to address Mr. Nguyễn Kế’s violations:
(i) Verification Report dated December 22, 2016, from the Internal Audit and Control Department of Bank N., Kon Tum Province Branch;
(ii) Verification Report dated January 24, 2017, concerning accounting and treasury operations, from the Internal Audit and Control Department of Bank N., Kon Tum Province Branch;
(iii) Dialogue Minutes dated December 24, 2016: “Regarding the review of certain complaints related to Mr. Nguyễn Kế, Director of the Bank N. Branch in K. District”;
(iv) Meeting Minutes dated January 5, 2017: “Regarding the review of certain complaints related to Mr. Nguyễn Kế, Director of the Bank N. Branch in K. District”;
(v) Inspection Minutes dated July 22, 2017, concerning certain debts related to complaints at the Bank N. Branch in K. District; and
(vi) Comprehensive Inspection Minutes dated September 9, 2017, at the Bank N. Branch in K. District.
Notably, among the six violations voted on by the Disciplinary Council for disciplinary action on July 13, 2017, some had occurred in 2014, 2015, and 2016. Based on the statute of limitations outlined above, violations committed by Mr. Nguyễn Kế in 2014 and 2015 had long exceeded the limitation period for disciplinary action. Consequently, the issuance of disciplinary decisions by Bank N., Kon Tum Province Branch, and Bank N. Vietnam against Mr. Nguyễn Kế after the statute of limitations had expired was not in accordance with legal provisions.
- Extension of the Statute of Limitations for Handling Labor Discipline
Although the statute of limitations for handling labor discipline is regulated as described above, provisions exist to allow employers to reinstate disciplinary proceedings in certain exceptional circumstances where they must temporarily suspend such actions. These circumstances are outlined in Clause 4, Article 123 of the 2012 Labor Code (applicable at the time Bank N. disciplined Mr. Nguyễn Kế) and have been retained in Clause 4, Article 122 of the 2019 Labor Code.
Specifically, employers are prohibited from imposing labor discipline on an employee during the following periods: (i) When the employee is on sick leave, convalescing, or on leave with the employer’s consent; (ii) When the employee is in custody or detention; (iii) When the employee is awaiting the results of an investigation and conclusions by a competent authority regarding violations specified in Clauses 1 and 2, Article 125 of this Code; (iv) When a female employee is pregnant, on maternity leave, or raising a child under 12 months of age.
Previously, the extension of the statute of limitations for labor discipline was only applicable once the employee was no longer in these circumstances and the limitation period had expired. To reinstate disciplinary proceedings, labor law permitted an extension of up to 60 days from the expiration date.
Thus, if an employee was no longer in a situation warranting suspension of discipline but the statute of limitations had not yet expired, the employer was still required to proceed within the remaining limitation period. A notable challenge here is that the process and procedures for handling labor discipline are time-consuming, while disciplinary decisions must be issued within the limitation period. If the remaining time was too short, employers were effectively unable to carry out the disciplinary process.
This shortcoming was addressed in the 2019 Labor Code. Clause 2, Article 123 of the 2019 Labor Code introduced the following adjustment: “Upon the expiration of the periods specified in Clause 4, Article 122 of this Code, if the statute of limitations has expired or has less than 60 days remaining, the limitation period may be extended for labor discipline handling, but not exceeding 60 days from the end of the aforementioned periods.”
In Judgment 01/2019/LĐ-PT, the representative of Bank N.’s branch argued that they were entitled to extend the statute of limitations for disciplining Mr. Nguyễn Kế because they were awaiting the outcome of an investigation by the authorities.
However, the Court determined that “based on the evidence, specifically a copy of Decision No. 201/QĐ-VKS dated August 28, 2018, issued by the People’s Procuracy of Kon Tum Province, this decision addressed the resolution of complaints and denunciations by Mr. Nguyễn Kế against Mr. Hồ Huy and Ms. Châu Thị Thanh, not the resolution of complaints or denunciations by the police regarding Mr. Nguyễn Kế as stipulated in Point c, Clause 4, Article 124 of the 2012 Labor Code.” Furthermore, during this period, Bank N., Kon Tum Province Branch, had sent a notice to the Party Committee of K. District, which proceeded to impose Party discipline on Mr. Nguyễn Kế.
Consequently, some of the violations cited by Bank N. as grounds for discipline had already exceeded the statute of limitations. Including these expired violations for consideration and voting by the Disciplinary Council in the disciplinary process against Mr. Nguyễn Kế was inconsistent with the Labor Code, disadvantaged the disciplined party, and failed to comply with the provisions of the 2019 Labor Code. Accordingly, the decision of the People’s Court of Kon Tum Province to resolve the case was entirely well-founded.
III. Conclusion
Through the analysis of Judgment 01/2019/LĐ-PT, it is evident that the statute of limitations for handling labor discipline serves as one of the factors limiting the employer’s right to impose labor discipline, requiring strict compliance during the disciplinary process. Failure to adhere to the regulations on the statute of limitations may render an employer’s disciplinary decision unlawful.
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